Shifting Auto Production Not Easy, Ghosn Teaches Leadership, Amazon’s 3rd Party Purchases

Paul J Daly  0:01  
Good morning. It is Monday, Monday, Monday. April 28 This is the automotive State of the Union. I'm Paul J Daly. This is Michael Cirillo in the office today, while Kyle is out there gallivanting in Waymo is in Arizona. We finally got the rider one. I'm so jealous, because every time we've been to Arizona or anywhere where there's way Mo, wherever we have to go is outside the radius, so we can never do it. And he was sending us all pictures and videos last night, or Waymo, so I'm sure there's a post incoming.

Unknown Speaker  0:32  
We're gonna see it on LinkedIn. I'm sure we are. I'm sure we are,

Paul J Daly  0:36  
yeah, so he's out there at the dmsc conference with so many of our friends. They switched locations. They used to be in Napa. What was went to that one a ton of times. Then it moved to Austin. Now it's in Arizona, Phoenix, and it's supposed to be a beautiful venue. A lot of people out there trying to get better at what they do. Kyle's out there, you know, making sure he holds it down. And we're here holding it down on this side, because we are just over. I mean, like one day, over two weeks from today, we will be the ASOTU team. Will be in Hanover, Maryland, getting ready to launch ASOTU CON 2025 you got two weeks to buy your tickets. And I know it's the auto industry, and people always wait, but it's been so much fun to watch all the tickets come in. We do still have some. You still need to be there. And we have people who have booked hotel rooms and have hotel rooms and have had hotel rooms for months, but they don't yet have tickets. So make sure it's the best time. Go to ASOTU CON com and get your tickets. Make sure you go check out the agenda, check out the speakers, because we have hundreds of them, and they are the people you want to be collaborating with a special thank you to our presenting sponsors this year, Reynolds, and Reynolds and Google for helping make us make this happen, for seeing the vision of the event far before anything was ready to post. So they're helping put together an amazing event. Have so many collaborators. Everyone is hyper engaged. We tend to take an activation mindset when it comes to live events. So it is not like a typical event. We think about, how can we be engaging, add value to the attendees at all times, the way we lay out the show floor, the exhibit hall, the podcast stage, the main stage, the food, the beverage. It's all designed so that you can actually learn things and find the answers you're looking for to navigate these waters. So go to ASOTU CON com, get your get your tickets, get your hotel room, get ready to go. Actually, it's really easy to fly into this area because you have

Michael Cirillo  2:28  
BWI. Don't use like, what, five minutes from the airport. It's probably

Paul J Daly  2:32  
like 1010, minutes from BWI. And if you need to fly into DC, either the DC airports, you can get there in like 45 minutes to an hour, depending on which one you fly into. So it's pretty easy to get to, and once you get there, you're not dealing with any traffic, you're not dealing with any mess. You don't have to run around here and there. It's all contained in one venue with a casino and lots of restaurants. It's a pretty amazing place. It's pretty

Michael Cirillo  2:53  
cool, you know? And here's the thing, right? There's a lot of there's a lot of stuff going on, right? People have a lot going on. And I mean, if you're listening to this, or you're watching this, and you're and you're thinking, man, I've just got so much going on. That's the exact reason why you need to be in that room, because there is so much going on. But to be around other individuals who are working through practically all of the things that are going on is exactly why you need to be in that room. You can't afford to not be in that room, the just the practical takeaway. And the thing that I think about, that I think is most impressive, is the fact that we don't as a so do, we don't have an agenda. There's not like a thing that's powering the thing. What powers the thing is getting you in the room with other people who are proactively working through all of the things that are going on. Yeah, that's why we have a vested

Paul J Daly  3:45  
interest in your walking away with a lot of actionable tactics. And you know, a lot of people are in the middle of all these, executing these large scale strategies, growing their groups and all that. If you can't go send one or two people on your team so that you can have your head on a swivel, even though you're so focused on what you're doing, you need to know what's happening, because things are changing super fast in tech, in data, in marketing with AI, and you want that before you start making a lot of decisions and strategies that don't include what's happening right now and what will certainly impact your business and execution over the next 12 months. Let's get into some news, folks, after a full quarter 25% I mean, not like a financial quarter, a full quarter of us automotive assembly capacity set unused at the end of 2024 what a what a script flip from what it was in 2022 this suggesting unique opportunity to shift production to the US admits the backdrop of President Trump's tariffs. However, it's far more complicated than it sounds. Toyota, BMW and Honda used over 80% of their capacity. Stellantis, GM, Ford and Nissan have more capacity than the first three that I mentioned, but have a lot of investment and logistical hurdles. Stellantis. Yes, their war and truck plant, guess this? Get this has just 17% utilization. That means 83% available. But can't, they can't quickly absorb new models without major investment, despite being able to build related pickups and SUVs Ford's flat, flat rock assembly plant could theoretically take on new models like the Mustang Mach e that are often made overseas or outside the US, but even the fastest transition would still take six months to a year. Sam Fiorini of auto forecast solutions said, quote, the rhetoric that moving assembly of vehicles into open spaces is easy and quick is just not accurate. So lot of talk, and this is kind of practicality, seems like there's some white space, but there's a lot of things in between just flipping the switch. It's one

Michael Cirillo  5:49  
of those things where all we have is time. So you might as well do something with the time. Whether it takes a month, six months a year, it doesn't really matter if we don't do something in this next time period there come this time next year, stellantis is still going to have 17% utilization in that space, so they got to do something with it. And

Paul J Daly  6:09  
you know, the pendulum has flipped back and forth, and often does when political parties change in office. However, it's tough to forget, or it's easy to forget. We are still like in the first 100 days of this administration. So even six months to a year from now, you're still going to have almost three full years to get market share to fix the problem. And I mean, you know, we're over here saying that we have no idea what it takes to tool a factory, bro,

Michael Cirillo  6:33  
you buy a new pair of sneakers and wear them for 100 days, they're still not even broken in yet.

Paul J Daly  6:37  
So true. So true. Speaking of broken in or broken out, segway broken out, I got him on that one. This. This one may be a little salt in the wound for Nissan dealers out there, but five years after his dramatic escape from Japan, former Nissan and Renault CEO Carlos goes in, is living a much quieter life in Lebanon, according to a Wall Street Journal article today, but remains an international fugitive, still shadowed by legal battles. If you remember, he escaped in a shipping crate to get out of the country. Wow, yeah. Oh, it was, like, full on spy movie, like, put the guy in a crate, put him on a boat, get him out of there, got him to Lebanon, goes and lives in a disputed $20 million mansion. So you know other people saying, like, that's not his right running, and he's running executive boot camps for mid level managers at a Lebanese University. Students are served espresso in cups printed with quote, coffee increases happiness despite legal threats from France and Japan, Lebanon's refusal to extradite its citizens, keeping him out of reach, he's denying all accusations, still blaming Nissan insiders for orchestrating his downfall to a block to block a deeper Renault Nissan Alliance. He remains bullish on globalization, calling recent tariff tensions a joke, criticized the post split struggles of Nissan and Renault saying, quote, Nissan is begging for some financial help, and Renault is back to what it was before 1999 a small European company says the international fugitive, and he's got 120 foot yacht, by the way, that's also Nissan is like we own that yacht. That's not

Michael Cirillo  8:20  
fugitive. When you say fugitive to me, I'm not picturing coffee espresso mansion. I'm picturing 1990 Harrison Ford tumbling down a hill on a bus.

Paul J Daly  8:31  
I think, I think he's doesn't seem to strike me as the kind of man who runs, well, wow, you know, and so. But

Michael Cirillo  8:38  
I mean, like, do these students not do their research on who? I

Paul J Daly  8:43  
mean, teaching the class? Maybe it's, maybe it's a perk. Maybe you're like, Oh, look. Maybe they advertise it. You know what I mean, like, international fugitive teaches our class here in Lebanon, okay,

Michael Cirillo  8:52  
but like, think about the fact that we're all here just living our lives. I'm excited about, I don't know what am I gonna do? Go to Home Depot later. And there are legit people like in the movies who are tracing phone calls and trying to find a thing that they can get. The guy and he's living in a mansion, sipping his espresso, his favorite, maca Rita right now, before he goes and teaches a class and sitting shirtless, in a button up white shirt. You know,

Paul J Daly  9:23  
I'm not getting with all of the I'm

Unknown Speaker  9:27  
just picturing like a movie scene. And he thinks, yeah,

Paul J Daly  9:30  
Chris White's little breeze helicopter on the pad. Yeah. Look. This is funny sometimes, like when you look at stories in the morning, you're like, all right, what are we going to talk about right? And this is just part of, part of the legacy of automotive and manufacturer that I think a lot of companies and a lot of OEMs are taking strategic shifts to get away from it at least. I can say several domestics Japanese automakers have had nothing but a wild ride, especially for Nissan dealers. Nissan's troubles. Have affected a lot of friends personally, and are continuing to do so. Frankly, I don't think anybody cares what he thinks about the industry. I think the Wall Street Journal just found a great way to bring an article up that has, I mean, it has definitely quite a bit of intrigue. And I think there are a lot of dealers across the country are like, how can we help you get him?

Michael Cirillo  10:19  
Yeah, and, you know, I appreciate we're one of the ones not talking about slate today,

Paul J Daly  10:23  
you know. But the reason we're not talking about slate today, but now we are, is because we talked about it before everybody else talked about it,

Michael Cirillo  10:34  
speaking of speaking of strategic shifts. Segue, it is surprising. Pivot from its traditional walled garden strategy, Amazon is testing a program that lets customers shop directly from third party brand websites without leaving its app, so shoppers can either be redirected to brand sites or complete purchases through Amazon's buy for me checkout feature. This is where Amazon handles Payment Transfer securely, while shipping returns and customer service stay with the brand. Interesting. The move allows Amazon to collect deeper shopper data, enhancing ad targeting and product recommendations. And I mean, okay, this is the thing, right? If you go back, I don't know, 10 years the CEO, the then CEO of IBM was on stage stating that data is the new natural resource. So a shift like this makes complete sense to me, but the industry experts suggest Amazon is trading short term sales for long term insights and stronger ad business. So I mean they just double down on this. Jason Goldberg of publicist says, quote, the bigger share of a customer wallet they see, the better they can target ads. Close. Quote,

Paul J Daly  11:50  
yeah. I mean, so Amazon understands what to do with customer data and shopping behavior, right? This isn't a wild swing for them, especially when you see them getting into other markets, automotive being one of them, the more data they have, especially if they know they can compete on price and compete on shipping, getting you, letting you buy products that may not be readily available, or shipping you out allows them to sell that Advent inventory gives them all the data on understanding what, where customers are going, why. It helps to inform their product catalog. It informs their independent like straight vertical manufacturing, and it gives them more data to sell or deploy against new products like autos and selling cars. And you know, as they turn into more of a third party marketplace too, in automotive, this data is just going to give them an edge, as they say, like, look, this is first party data that we have that nobody else has. And if you list your inventory on Amazon, and you're targeting and everything has the benefit of this immense data. So, you know, they can turn off the faucet whenever they want. So it doesn't surprise me that they're trying some new innovative things and allow people to stay in the app, but bounce out to these other retailers. I do think, though, man, I think that if I'm on this platform and all of a sudden I have to deal with different shipping, fulfillment and returns, yeah, I think I'm totally going to hesitate. That's one of the biggest reasons I do business with Amazon is because the checkout, the shipping, the return process, is known. And I wonder if they're going to get some pushback on that as things start to not go the Amazon way well.

Michael Cirillo  13:20  
And I mean, like when I really think about it, the thing that excites me most about this is the thought of people getting their cars delivered to the wrong house. Because it's like a gamble with my Amazon packages. It is a gamble if I'm going to get my product I know

Paul J Daly  13:36  
on time, as stated, in the right house. This is a great comment that came in on the last story, but we're already into this one. John Roper says Harrison Ford was innocent in fugitive just just here to raise awareness. That's an amazing shot. Thanks for making this was that the one where he was that the one where he was hiding out in the Amish house? No,

Michael Cirillo  13:58  
this is that one too. He, this is where he gets accused of murdering his wife, Oh, yes. And he's innocent, because he use a well sought after, uh, surgeon and well respected and, yes, gets set up and gets into the system, then breaks out, and then Tommy Lee Jones and the they come after him. And there's that one scene where, classic dude, they're standing in the dam, you know, the opening of the dam, and the Harrison photo goes, Oh, he jumps, I'm innocent. And Tommy Lee Jones famously says, I don't care. And then he jumps out, right? That's a

Paul J Daly  14:31  
great, I gotta watch that. Oh, that's a classic that. Prepare to watch it in three, four, by the way, yeah, because you're that old

Michael Cirillo  14:40  
that is true, where you get the green screen, FBI warning that happens first the slow

Paul J Daly  14:45  
like priority laws. Well, look, we hope we, at the very least, we kept you a little bit entertained and understanding where Charles goes. It is hanging out. If you want to take a leadership class from from a fugitive, you know where to go now. Look, go to. Soda con com. Get tickets. We're going to be talking about the actual stuff you.

Transcribed by https://otter.ai

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